Even Borrowers Agree, Student Debt Is Worth It

FILE – In this May 15, 2016 file photo, students embrace as they arrive for the Rutgers graduation ceremonies in Piscataway, N.J.

ASSOCIATED PRESS

The amount of student debt, in raw, cumulative dollars is unquestionably growing, inching above $1.5 trillion. As a result, you cannot find anyone in the press, punditry and political class who has not declared student debt a “crisis” or a “big problem” or a “warning sign” or something. Maybe it is.

But it is not a bad investment.

In fact, the incessant drum beat around a student loan crisis probably obscures the reality that getting a college degree is the best investment anyone can make, regardless of how you pay for it. In other words, if loans are necessary to pay for advanced education, take out loans. The lifetime benefits are not just financial. But even the financial ones are significant and not in dispute.

Borrowers agree.

According to national poll conducted in March by Morning Consult, 61% of adults said that, even based on their “current financial situation,” taking out student loans was worth attending college. More than twice as many said loans were “definitely” worth it (35%) as said they “definitely were not” (16%).

A majority of all age groups, including those in school now and those most recently in the workforce and paying down the most debt, said loans were worth it. Generation-Z, which the poll identified as 18-21 years old, said loans were worth it by a margin of 79% to 19%. Even among Millennials, ages 22-37 and the generation with the most student debt, 56% said the loans were worth it.

It’s probably not surprising that among student borrowers who now make more money or have attained higher degrees, even more support taking student loans. Those who earn $100,000 a year or more think loans were “worth it” by 80 points – 79% to 19%. Those with at least a bachelor’s degree say loans were worth it by a 72 to 26 margin. Of course, proving the point, high earners and college graduates are heavily correlated groups.

But naturally, since this is a “crisis” and all, the press coverage of the poll didn’t reflect that borrowers said their loans were worth it. Instead, as examples, CNBC’s headline was “36% of college grads with student loans say the debt wasn’t worth it…” and Business Insider’s headline was “Nearly half of indebted millennials say college wasn’t worth it…”

Sure, but, again, college is provably “worth it” and a majority of borrowers said so.

Still, you may say that more than a third of borrowers taking a dissenting, “not worth it” view is a bad sign. But the poll indicates that most of those (56%) who said their loans were a bad deal didn’t graduate with a four-year degree. That’s easy to understand. Debt and no degree is probably not worth it.

So, it says a great deal that, even then, even strictly among those who did not get a bachelor’s degree but do have student debt, the value of student loans was evenly split – 47% saying “worth it,” 48% saying not.

Further, the poll doesn’t factor in the type of degree or the type of college. For example, a student who borrowed to attend a for-profit college or get an online degree, which are increasingly the same thing, may find those loans were not worth it because the degree wasn’t. Or if you’re in default on your loans, you may likewise consider them “not worth it.”

And, like earnings to education, the correlation between for-profit colleges and bad outcomes is clear. According to loan provider Student Loan Hero, nearly half of all borrowers (48%), “who attended for-profit colleges default within 12 years, compared to 12% of public college attendees, and 14% of nonprofit college attendees.”

In other words, if you took out loans but didn’t graduate or were one of the hundreds of thousands of students snookered into borrowing for a bad education and now can’t make the payments, yes, you probably would tell a pollster that your loans were “not worth it.” Probably they were not. Neither one is related to the debt itself.

Instead, what this poll uncovered, and most of the press completely missed, was not dissatisfaction with student debt, but the problem of borrowing and not graduating and the problem of borrowing for a for-profit, sub-prime education. Those are real problems that deserve words like “crisis.”